09 Jan 2014
Tapping into Opportunity
Laura Shenkar (MBA 1992) is helping companies and governments find new technologies to profit from smart water-use practices.by Constantine von HoffmanTopics:
by Constantine von Hoffman
For many of us, water isn't something we give much thought to. Why should we? Turn on the tap and it's there. If you have to pay your town or city for water, chances are you don't pay very much.
Unfortunately, someday in the not-too-distant future, that will likely change and then all of us will be thinking about water a lot.
Laura Shenkar (MBA 1992) knows that, and the company she founded, Artemis Water Strategy, is dedicated to finding technologies for companies and governments around the world to use less water. She isn't trying to get them to do this out of some nebulous wish to do good, however. She's doing it because being smart about water will save these organizations a lot of money.
"Providing dramatic improvements in how much water we use, and the natural resources for using water, is one of the greatest business opportunities of our time," says Shenkar.
Her awareness of how precious and limited water can be began while growing up in Israel. The Middle East has prospered for millennia by making the most out of what relatively little water there is in the region. Since the time of ancient Babylon, civilizations have created and perfected irrigation systems and techniques still used today. Unfortunately, water has also been the cause of many bloody wars in the region.
In the US, conflict over water hasn't reached that intensity, but bitter legal and political disputes are taking place. Some are between states, as is happening between Florida and Georgia, and some are among water districts within a single state, such as California. Shankar has worked on this issue as well, coauthoring the water policy paper that has driven California's water conservation efforts.
The cause of the conflict in the US is the same as it is around the world: growing demand and limited supply. According to US research, the world's demand for fresh and pure water is forecast to exceed supply by 50 percent by 2025. Other studies have found that, within a generation, one in three people in the world will be living on half the water they need to survive. That will happen because people indirectly use a lot more water than they realize. One place is in their computers. From digging minerals out of the ground to processing them through building the machine, creating a single desktop computer uses nearly two tons of water. Making a pair of denim jeans can use up to six tons. Producing two pounds of wheat needs one ton, and two pounds of beef requires between 15 and 30 tons.
"Despite looming water scarcity crises in the US and around the world, water is free and abundant in most of the developed world," says Shenkar. Because of this, few governments are spending money to improve their conservation efforts. But technological innovation requires funding and that is currently coming mostly from the private sector.
"Most businesses don't yet understand about water and its costs," Shenkar says. "We work with oil, energy-product, and beverage companies, and they know they have major water issues."
This has created a rapidly increasing demand for technologies and services to discover, manage, filter, and disinfect and/or desalinate water, and to improve infrastructure and distribution and reduce water consumption.
Coca-Cola, which increased its water efficiency by 21.4 percent between 2004 and 2012, recently announced a new initiative to increase that efficiency by another 25 percent. Or look at another example: extracting shale gas ("fracking"). It costs from 50 cents to $4 to treat a barrel of the water used in the process. Oil companies are spending a lot to get this cost down and that's why it is currently a hotbed of water-tech activity.
Although fracking has been criticized for the potential contamination of ground water and depletion of fresh water, Shenkar says there are solutions to this.
"Frakking can absolutely be made environmentally safe," says Shenkar. "The oil and gas companies are working hard to respond to the evolving government regulations. There's a real opportunity here for firms that can quickly provide the technology to meet these new standards."
Though the water-tech industry is still fairly small—it is estimated today at about $400 billion per year worldwide—because of the constant need for technological innovation, Shenkar sees huge opportunities for startups. In 2009 she started the Artemis Top 50 competition, which brings together leading experts in the water industry and provides a rigorous, independent mechanism for identifying promising early-stage water-technology companies. She is using what she's learned from the competition to help get companies to invest in providing clean water in impoverished nations. In September 2013, for example, the US Agency for International Development will launch a competition created by Shenkar to bring economic drivers of clean tech to West Africa.
"It is a tremendous business challenge," she says, "but, just like in the early days of the Internet, the smartest and most agile companies are the ones that will reap the rewards."
Class of MBA 1992, Section D